Harbinger Capital Partners, the principal owner of the currently
bankrupt 4G wireless wholesaler LightSquared Inc., has leveled
DISH Network Corp.
) in a Colorado federal court. Harbinger has filed suit against
DISH and its Chairman Charlie Ergen of at least $1.5 billion for
allegedly attempting to take away Harbinger's control of
In May 2013, DISH had offered $2.22 billion to acquire 40 MHz of
wireless spectrum held by LightSquared. Harbinger rejected DISH's
bid stating that the latter had resorted to fraudulent means to
enter the bidding process. Notably, both DISH and
), controlled by Charlie Ergen, are major competitors of
LightSquared. DISH currently carries a Zacks Rank #3 (Hold).
In 2012, the Federal Communications Commission (FCC) had refused
the use of this particular airwave as it was interfering with the
global positioning system. Consequently, this had led to the
bankruptcy of LightSquared. Later on, the FCC conducted several
tests on the spectrum and eventually permitted an auction with a
few modifications. Nevertheless, in Jan 2014, DISH dropped its plan
of acquiring this spectrum.
In Dec 2012, the U.S. Bankruptcy Court in Manhattan allowed
LightSquared Inc. to send a standalone bankruptcy plan to creditors
for vote. This bankruptcy exit plan was supported by Fortress
Investment Group LLC., JPMorgan Chase & Co. and Melody Capital
Advisors LLC. Meanwhile, Charlie Ergen accumulated about $1 billion
of LightSquared's senior debt, which has potentially conferred on
him the veto power over any proposal of Harbinger.
Last month, Harbinger formed a bankruptcy exit plan for
LightSquared. According to the plan, the majority control of
LighSquared will be in the hands of JPMorgan Chase & Co.,
Cerberus Capital Management LP and Fortress Investment Group LLC.
Harbinger will control 12.5% of LightSquared while Charlie Ergen
will be repaid for LightSquared senior notes he currently holds.
However, Ergen has decided to challenge this plan in the U.S.
Bankruptcy Court in Manhattan.
DISH, the second largest satellite TV operator in the U.S., has
constructed an extensive wireless/satellite spectrum base over the
last seven years. On Jun 17, 2013, DISH and
NTELOS Holdings Corp.
) jointly started providing fixed-mobile broadband network to offer
high-speed Internet service in several parts of the U.S. DISH
further stated its intention of pursuing the acquisition of
T-Mobile US Inc.
) only if
) decides not to proceed with its takeover plan.
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DISH NETWORK CP (DISH): Free Stock Analysis
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